Nintendo's Project Cafe Challenges

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Navigating the course between the hardcore and casual will be tough.

By Lucas M. Thomas

We're just a week away from Nintendo's next turning point. By this time, next Tuesday, the reveal will have been made – Project Cafe will be named and known, and we'll finally have firm confirmation about the direction the company's planning to take its next console.

It's expected, though, that that direction will be somewhat a change of the course charted through the last five years. Nintendo set out to explore the "blue ocean" in 2006. The term, drawn from the 2005 Harvard Business School book Blue Ocean Strategy, encompasses a novel marketing approach. It suggests that most companies today are in competition with each other for the same audiences – fighting one another in bloody battles that result in "red oceans" of ever-diminishing market opportunity – while more success could be had by instead separating from the pack and sailing into the blue ocean of untapped, potential buyers instead.

Nintendo's bible for the last five years.

Nintendo embraced this idea and shocked the industry a half-decade ago by refusing to follow Sony and Microsoft into an HD graphics competition, and instead brought forth a new, completely unrelated product – Wii – that used motion control and casual-appeal titles to access an entirely new crop of consumers. It worked. Wii was an incredible sales success, and the millions it's made for Nintendo are confirmation that pursuing those former non-gamers with the blue ocean strategy was wise and well-timed.

But that was five years ago. Now, on the eve of the next E3, rumors are circulating that Nintendo may be finished with sailing into the unknown for the moment and are planning, instead, to turn their ship around (or, at least, in a different direction) and get back into the red ocean battle for existing, long-term, hardcore video game fans. If this is true, and if Nintendo hopes to succeed at reclaiming a piece of that market it left behind, the company will be facing some critical challenges.

The Challenge of Timing

Nintendo's been largely off the map and out of the minds of hardcore gamers for at least five years now – and that's being generous to say the least. Those players who prefer Mature-rated content, robust online multiplayer and a little more grit than sunshine have long since made their choice of preferred home console between the PlayStation 3 and the Xbox 360. The Big N's first hurdle in getting back on those players' radars is to overcome these past five years of being ignored and brushed aside.

And it could happen with proper timing. Nintendo is poised to be the first of the big three console makers to come out of the gates and kick-start the next generation, and that distinction always comes accompanied with a piqued interest from everyone who calls themselves a gamer. Whether you were a Microsoft fan or not, you paid attention when the 360 beat the PS3 and Wii to market by a full year. And that head-start helped the Xbox brand immensely in this era.

The Xbox 360 hit first in this gen. Will Nintendo get the next head-start?

It could be even more helpful to Nintendo – because Nintendo's never enjoyed that same head-start. The Wii was the last of its generation to go on sale. The GameCube before it was the same way. The Nintendo 64, before that, trailed behind the original PlayStation by two years. The Super Nintendo? It got beat by Sega's Genesis and Hudson's TurboGrafx-16, again by multiple years. You'd have to go all the way back to the first NES to begin to make a case for Nintendo getting out of the gates first, but its only competition was an industry on life support, clearance racks of old Ataris and bargain bins of Pac-Man cartridges.

So Nintendo's never really been in this spot before. If it could capitalize, if it could leap ahead of Microsoft and Sony's next machines by coming to market well in advance of either of them, then that head-start could very well be the first right step in retaking some portion of the hardcore crowd. The people who are tech-hungry. The early adopters. 2006 was the last time they had the chance to put money down on a truly new home console machine, and even if their next chance has the name "Nintendo" on the box you can bet that many will still open their wallets.